The forex market is a globally decentralized market where different currencies are traded. Due to this, it is also referred to as the currency market where the relative values of various currencies are determined. Although each currency has a name, in the forex market, it is recognized by its symbol or the ISO code. The International Standards Organization assigns a three-letter code to every currency and puts it into the ISO 4217 currency codes list. This list is standard in finance markets across the globe and is used as a regular reference.
Currency Symbols: History
It was in the 1970s when the forex market, which we trade in today, started forming. It was during that period that counties started progressing towards floating exchange rates from the earlier exchange rate regime. In 1973, a decision was taken by the ISO Technical Committee 68 to develop codes for representing currencies and funds in trade, banking and commerce. In 1978, a group of experts related to the UN agreed to three-letter alphabetic codes - "Codes for the representation of currencies and funds" – that were later listed in the International Standard ISO 4217.
Forex Trading: ISO 4217
ISO 4217 is the international standard that illustrates three-letter alphabetic currency codes established by the International Organization for Standardization. Currency symbols mentioned in the ISO 4217 list are also used on international train tickets and airline tickets. This eliminated any ambiguity about the price.
Every currency has also been assigned a three-digit code number as described in ISO 3166. For instance, the United States dollar or USD has the numeric code 840.
Popular Currency Symbols
Here are some currency symbols of widely traded currencies in forex trading:
- US Dollar: USD
- British Pound: GBP
- Swiss Franc: CHF
- Japanese Yen: JPY
- Australian Dollar: AUD
- European Currency Unit: EUR
- Canadian Dollar: CAD
- New Zealand Dollar: NZD
Many currencies have been created and old currencies have been discontinued over time. Such changes occur owing to new governments, currency revaluation because of enormous inflation or treaties among countries to use a currency as a standard. Due to this, the ISO 4217 list of currency symbols has to be updated from time to time. The responsibility of maintaining this list of symbols is handled by SIX Interbank Clearing, which is an ISO 4217 maintenance agency (MA).
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